Facility Aims to Improve Trade Logistics

July 3, 2009

Two and half years ago, Don Ratliff, executive director of the Supply Chain & Logistics Institute at the Georgia Institute of Technology, came to San José to speak at a logistics trade show organized by the Costa Rican Foreign Trade Promotion Office (PROCOMER).

During his visit, Ratliff, members of PROCOMER and the Costa Rican Chamber of Industries, discussed the idea of bringing a supply chain management and logistics center to Costa Rica.

“We had a number of conversations with people in Costa Rica about how a logistics center could impact trade,” Ratliff said. “We began talking about developing a project here that could potentially be a hub for all of Latin America.”

On August 20, the idea birthed that weekend will become reality, when the Georgia Tech Trade Chain Innovation and Productivity Center (TIP) opens in San José.

The center, located in a building shared by PROCOMER and the Chamber of Industries in the eastern suburb of San Pedro, aims to improve the efficiency of foreign trade. The goal of the center will be to research the areas in which foreign trade is slowed and attempt to ameliorate those flaws to improve the process of trade between the United States and Costa Rica.

“Studies show there are trade inefficiencies in Latin American and Costa Rican trade with the U.S.,” Ratliff said. “There is a wide range of issues that we are going to try to look at and examine to improve the operation.”

Ratliff said that international logistics, such as those between the U.S. and Costa Rica, are improved with research within the borders of the trading partner, as an understanding of the internal processes of that partner is essential to improving trade operations.

“Trade is different depending on the commodities you move and the countries involved,” Ratliff said. “You have to understand each commodity, the infrastructure used in production, the political issues of the country, their technology and the transportation used. There are lots of issues that you have to understand in order to make better decisions, improve productivity and eliminate delays.”

Though the official opening of the facility will be August 20, Ratliff said that three staff members, including Sebastian Urbina, Georgia Tech graduate and managing director of TIP, have been at work here since February. There are no students currently working at the center, though Urbina said it intends to bring Georgia Tech graduate students to conduct research at the center in the near future. Urbina said the center also is exploring the idea of involving Costa Rican university students as the center develops. The center is funded by an anonymous private donor.

This is the second international logistics center created by Georgia Tech, which developed the Logistics Institute Asia Pacific in 1999 with the National University of Singapore. Ratliff said the university chose Singapore because it served as a central shipment hub in Asia. He said he believes a location in Costa Rica provides similar benefits.

“We hope to begin in Costa Rica with the (idea) that we will eventually create centers in other Central American countries,” Ratliff said. “Starting in Costa Rica is ideal for us. There is a port on each side, you can fly there in under four hours, the population is well educated, there is a large English-speaking contingent and it’s a nice place to visit.”

Costa Rican president Oscar Arias, Georgia Tech President G.P. ‘Bud’ Peterson, Ratliff and other Georgia Tech staff are expected to attend the opening ceremonies.

 

Logistics Performance Index

The World Bank’s Logistics Performance Index (LPI) ranks a country’s performance – on a scale of 1 to 5 – in the areas of efficiency of customs and border procedures, quality of infrastructure and information technology, ease and affordability of arranging shipments, competence in the local logistics industry, ability to track and trace shipments, domestic logistics costs, and timeliness.

 

Rank

Country

LPI

1

Singapore

4.19

2

Netherlands

4.18

3

Germany

4.10

14

United States

3.84

32

Chile

3.25

54

Panama

2.89

56

Mexico

2.87

66

El Salvador

2.66

72

Costa Rica

2.55

75

Guatemala

2.53

80

Honduras

2.50

122

Nicaragua

2.21

www.info.worldbank.org/etools/tradesurvey                                               Source: World Bank

 

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